November 11, 2007

We were walking in the heart of America the other day (to Spooky Canyon near Escalante, Utah), when the proprietor of Uncorrelated.com asked me, 'So why are oil prices so high?' This is why:

On the back of sky-high minerals prices and record profits of $17bn a year, BHP is on a roll. "I'm not saying the sector is immune to the business cycle," Kloppers said recently, "but a seminal event is happening in the world: two billion people are entering the industrial age. It's like rebuilding Europe after the Second World War but on an even bigger scale."

(Kloppers is an ex-colleague from Billiton. Now he's the new CEO of the biggest mining company and has just launched what looks like the biggest takeover in history by approaching RTZ).

I'm an Americaphile, but here's what I sense:

The Moving Finger writes; and, having writ, Moves on: nor all thy Piety nor WitShall lure it back to cancel half a Line, Nor all thy Tears wash out a Word of it.

The USA has gone ex-growth.....intellectually, spiritually, economically. It is super-affluent and lacks the stimulus of creative immigration. War, serious war, may re-invigorate America, but war may not be a happier state than stupor. Nor China, nor India, nor Europe has replaced America, but America's psychological dominance is waning. Interesting times.